A Partnership Voluntary Arrangement (PVA) is a formal arrangement between an insolvent partnership and its creditors for time to pay.
Should a partnership experience severe cash flow problems, there are a number of options available to the partners to formally winding-up the partnership. That, however, could also require the bankruptcy of one or more of the partners. Where the partnership business is viable, the ramification of a winding up can be avoided by the partners of the firm proposing a PVA to protect the partnership from the action of its creditors, while it continues its business and repays creditors. It will take time: the object of the PVA is to pay creditors more than could be achieved than if the partnership was wound up.
What MGA does to help
A PVA is administered within the Insolvency Act and Insolvency Rules. Consequently, the directors require the expertise of a regulated insolvency practitioner. MGA will :
Once the arrangement is in place, the partners will retain management of the partnership, and MGA, in the capacity as supervisor, will ensure that the terms of the proposal are adhered to.